Uncertain fiscal consolidations

Bi, H., Leeper, E.M. and Leith, C. (2013) Uncertain fiscal consolidations. Economic Journal, 123(566), F31-F63. (doi: 10.1111/ecoj.12011)

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The paper explores the macroeconomic consequences of fiscal consolidations whose timing and composition—either tax- or spending-based—are uncertain. We find that the composition of the fiscal consolidation, its duration, the monetary policy stance, the level of government debt, and expectations over the likelihood and composition of fiscal consolidations all matter in determining the extent to which a given consolidation is expansionary or successful in stabilising government debt. We argue that the conditions that could render fiscal consolidation efforts expansionary are unlikely to apply in the current economic environment.

Item Type:Articles
Glasgow Author(s) Enlighten ID:Leith, Professor Campbell
Authors: Bi, H., Leeper, E.M., and Leith, C.
College/School:College of Social Sciences > Adam Smith Business School > Economics
Journal Name:Economic Journal
Copyright Holders:Copyright © 2013 The Authors
First Published:First published in Economic Journal 123(566):F31-F63
Publisher Policy:Reproduced in accordance with the copyright policy of the publisher

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Project CodeAward NoProject NamePrincipal InvestigatorFunder's NameFunder RefLead Dept
480171New Directions in Monetary and Fiscal Policy Analysis at the Macroeconomic LevelCampbell LeithEconomic & Social Research Council (ESRC)ES/G006873/1BUS - ECONOMICS